Reliance, Disney face antitrust hurdles in India media merger

Reliance Industries and Walt Disney are facing significant challenges in securing antitrust approval for their $8.5 billion merger of India media assets. The deal, which would create the largest entertainment conglomerate in India, has come under intense scrutiny from the Competition Commission of India (CCI) due to concerns about market dominance and the control over lucrative cricket broadcast rights.

In an effort to expedite the approval process, Reliance and Disney have proposed selling off a select number of television channels   fewer than ten, according to Reuters sources close to the matter. These concessions are aimed at addressing concerns about the merged entity’s potential market power, particularly in regional Indian language channels where the two companies hold a significant share.

The proposed divestitures are reminiscent of the 2022 attempt by Zee and Sony to create a $10 billion TV giant in India. In that case, the companies offered to sell three TV channels to gain CCI approval, though the merger ultimately collapsed.

Cricket, India’s most popular sport, has emerged as a critical point of contention in the merger discussions. The combined entity of Reliance and Disney would hold digital and television rights to major cricket leagues, including the highly coveted Indian Premier League (IPL), ICC Tournaments rights and Domestic India matches rights.

This dominance has raised concerns about the potential control over the advertising market, with Jefferies estimating that the merged company could command up to 40% of the market share in TV and streaming segments.

K.K. Sharma, a former head of mergers at the CCI, highlighted the gravity of the situation, stating, “With Disney and Reliance together, hardly anything of cricket will be left … Here, it is not merely dominance but almost an absolute control over cricket.”



 

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